Gap Ups and Squats. What Now?

Hi everyone,

I hope you are having a great Monday!

In this post I’ll concisely share my thoughts on today’s action. And share a bunch of stock charts that caught my eye.

Now let’s dive in ↓

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Market Action

The QQQ gapped up but then closed near yesterday’s close after filling the gap. At highs it was 7% from the 50 day.

The IWO popped higher through the 21ema and closed much better. Could we see some rotation into smaller growth names and the big caps rest.

Volume

Volume was lower on the NYSE and lower on the Nasdaq.

Trends ( Based on QQQ)

Shortest - 5 Day SMA - UP - Above Rising

Short-term - 21 ema - Up - Above Rising

Intermediate term - 50 sma - Up - Above Rising

Longterm - 200 sma - Up - Above Rising

Group/Themes Action

Many gaps ups and squats on the focus lists.

Key Stocks in Deepvue

SMCI big fade off morning push highs but okay close after filling the gap

NVDA great trend. No real low risk buy/add possible until we pullback

AFRM watching for a range to form above the 21

Same with PLTR

IOT big squat. keep an eye on it to see if it can tighten

TSM inside day pulling back to the HVC

GCT speculative name but big upside reversal off base pivot

PATH popping through the 21

ARDX inside day and up

Market Thoughts

See how these gap ups act this week. Many look like the start of potential moves but need to form ranges and hold. Good to see IWO moving up through the 21

Reminder:

Risk Management is Paramount

Refuse to enter randomly without managing risk and wait for the spots to develop, they will. Stocks during strong moves always pull back to the 21 ema, 50 sma multiple times.

Have patience, focus on the best stocks with the greatest potential. These will telegraph the rest of the market.

Take it day by day and manage risk along the way. Be ready for anything

What are your thoughts on today’s action? (Leave a comment below)

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Richard


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